The SDE++ subsidy in the Netherlands: how the scheme works and where the legal risk sits

The SDE++ (Stimulering Duurzame Energieproductie en Klimaattransitie) is the central Dutch operating subsidy for renewable energy and CO₂ reduction, and often decides whether a business case closes. It is also a public law instrument, administered by the Netherlands Enterprise Agency (RVO): enforceable obligations, hard deadlines, and a formal objection and appeal route.

An operating subsidy, not an investment subsidy

The most common misunderstanding among foreign sponsors is that the SDE++ is a capital grant. It is not. An investment subsidy pays a share of capital expenditure once; the SDE++ pays nothing towards the build. It pays, over twelve or fifteen years by category, a top-up on each unit actually produced or tonne of CO₂ avoided. Three figures drive it:

• The base amount (basisbedrag) — the cost price per unit of production, or per tonne of CO₂ avoided, that the scheme will underwrite. In practice it is the amount tendered, capped at the category maximum.
• The correction amount (correctiebedrag) — the market revenue the installation is deemed to have earned in a calendar year, from realised energy prices and, where relevant, certificate values.
• The base energy price (basisenergieprijs) — a floor below which the correction amount may not fall, capping the subsidy on the downside. RVO describes it as two thirds of the long-term price, and the PBL parameter advice for the 2026 round sets it the same way: two thirds of the long-term energy price, taken from the most recent Klimaat- en Energieverkenning as the average of real energy prices over the coming fifteen years. It is calculated as the correction amount is, with the long-term energy price in place of the market index, and the profile and imbalance costs that enter it are set separately for onshore wind, offshore wind and solar PV.

The subsidy is the gap between the base amount and the correction amount, multiplied by eligible production. So as market prices rise, the payout falls, and if market revenue exceeds the base amount the subsidy is nil for that year; the floor prevents an unlimited subsidy if prices collapse. The scheme narrows the revenue band; it does not guarantee a return. Eligible production is capped too: each category has a maximum number of full-load hours per year, and the decision states a maximum subsidisable output.

From renewable energy to CO₂ reduction

The predecessor schemes subsidised renewable energy and ranked applications on cost per kWh. The second plus sign marks the shift to CO₂ reduction as the organising principle, across five categories: renewable electricity, renewable heat, renewable gas, low-carbon heat, and low-carbon production.

This changes the ranking. Because the denominator is the euro required per tonne of CO₂ avoided, a solar project competes not only with other solar projects but with heat pumps, industrial electrification, geothermal heat and carbon capture. A technology that is cheap per kWh can rank badly if its abatement per euro is poor. Rounds have also ring-fenced budget per domain so that one technology cannot absorb everything, and the 2026 round keeps that. Ring-fences have applied since the 2023 round to the low-temperature heat, high-temperature heat and molecules domains, and for 2026 they are set at €750 million, as they were in 2025.

The phased tender and how applications compete

The SDE++ opens once a year for roughly four weeks, in phases of increasing subsidy intensity. The 2026 round runs from 27 October 2026 at 09.00 to 26 November 2026, in five phases with phase amounts of €75, €150, €225, €300 and €400 per 1,000 kg of greenhouse gas. The budget for the round is €8 billion.

Within a phase, applications are handled in order of receipt. If the budget released on a given day is exceeded, RVO ranks that day’s applications on subsidy intensity — the subsidy sought per tonne of CO₂ avoided — and the lowest wins. An application may only be filed in a phase whose ceiling is at or above the amount tendered.

Early and cheap often beats late and maximum

Applying in phase 1 at €75 per tonne means a lower base amount, but a budget that is still entirely open. Waiting until phase 5 secures the maximum, but by then much of the budget may be committed and every project that waited is in the same queue. In a heavily subscribed round the later phases may never be reached with meaningful budget left, so a lower tender filed early frequently beats a maximum filed late. Against that, the awarded base amount is fixed for the whole term with no way to increase it if costs prove higher, so the choice is a trade between probability of award and lifetime revenue.

The application

The applicant must be the intended producer: the party that will own and operate the installation. This constrains project finance structures: the applying entity should be the one that holds the asset, and moving an award into a project SPV later requires RVO’s consent. A second gating condition is that no irreversible investment commitments may have been made before applying: preparatory spend on studies, design, permitting and land is fine, signed supply contracts or placed orders are not. The file typically requires:

• Permits. The environmental permit (omgevingsvergunning) must already be in place when the application is filed, not merely applied for. Mining permits apply to geothermal projects.
• A feasibility study (haalbaarheidsstudie) covering the installation, financing plan, equity contribution, cost and revenue calculation and projected output. RVO notes descriptions are often too thin; a weak study is a routine ground for rejection.
• A declaration that the applicant is not an undertaking in difficulty. This is a formal requirement in its own right and is easily overlooked by a group whose figures have deteriorated.
• Consent to information sharing. For solar installations the applicant must consent to information about the feed-in capacity being shared.

The grid connection: the practical bottleneck

For renewable electricity categories, and certain gasification and wastewater CHP categories, an applicant using a large-consumer connection (above 3 x 80 ampere) must submit a transport indication (transportindicatie) from the grid operator, valid for the round. This is where many Dutch projects now stall: an operator that cannot offer transport capacity cannot issue a usable indication, so an otherwise fundable project may be unable to apply at all. Responses include a smaller feed-in capacity, non-firm or time-bound transport, storage, or structuring behind the meter. For solar PV, most categories separately cap contracted feed-in capacity at 50% of peak capacity, with limited exceptions for sun-tracking and vertical ground-mounted systems — settle this before signing the connection agreement.

The decision and the obligations that follow

RVO aims to decide within thirteen weeks of the close of the round. A grant decision (beschikking tot subsidieverlening) is not a payment: it is a conditional award carrying obligations for the life of the project.

The period within which the installation must be taken into use is fixed per category by ministerial regulation (art. 61 Besluit stimulering duurzame energieproductie en klimaattransitie). The deadline runs from the grant decision and differs by category: two to four years for solar PV, roof-mounted or ground-mounted, depending on the size of the installation and on grid capacity; four years for onshore wind; four years for geothermal and advanced heat; and three to four years for hydrogen and electrolysis.

Progress reporting is not housekeeping: failure to report can lead RVO to suspend payments and, in serious cases, supports withdrawal of the award.

Payment, annual correction and settlement

Payment runs on advances. RVO calculates an expected annual entitlement from expected production and a provisional correction amount, and pays monthly advances at 80% of it. The definitive correction amount is fixed by the Minister and published in the Staatscourant, typically in spring, for the preceding calendar year. Once that and the actual metered output are known, RVO adjusts: a lower correction amount or higher output means additional payment, while higher prices mean overpayment, recovered by set-off against future advances.

Production data does not come from the recipient. It flows from the grid operator to VertiCer — the body formed by the merger of CertiQ and Vertogas — and on to RVO. If it does not arrive, payment stops, so metering that is wrongly registered or a meter that falls out of certification has an immediate cash consequence.

At the end of the term RVO issues the final determination, comparing total entitlement against everything advanced and adjusted. Because entitlement is capped by the maximum subsidisable output, overproduction earns no more and underproduction less. Banking softens that in two directions. Production not achieved in a year can be made up in later years. Production above the maximum subsidisable annual output can be carried to a following year and drawn on when a later year disappoints, but only up to twenty-five per cent of the subsidisable annual output — and that second form has not been available for the solar PV and wind categories since the 2024 application round.

Negative electricity prices

Negative day-ahead prices are now routine in sunny and windy hours, and the scheme’s treatment of them has been progressively tightened. This materially affects solar, which produces precisely when prices are most likely to be negative. The regime depends on the round in which the award was made:

• Awards 2008–2015: no reduction. Subsidy is paid even when the price is negative.
• Awards 2016–2022: subsidy is withheld only where the price is negative for a continuous period of six hours or more, and only for installations of 500 kW or more (3 MW or more for wind).
• Awards from 2023 onwards: subsidy is withheld for electricity fed into the grid whenever the price is negative, for installations of 200 kW or more per grid connection. There is no minimum duration.

Two changes took effect on 1 October 2025, when Dutch electricity prices moved to quarter-hourly settlement. For 2023-and-later awards, the correction now applies to each quarter-hour in which the price is negative, rather than each hour. For 2016–2022 awards, the six-hour period need no longer begin on the whole hour and can start at any quarter-hour, making the trigger easier to hit.

For a 2023-or-later solar project, a growing share of annual output therefore attracts no subsidy at all. That belongs in the base case, not a sensitivity. It also interacts with curtailment: switching off in negative-price quarters may be rational, but it reduces output against the maximum subsidisable production and may breach an offtake obligation.

The interaction with a power purchase agreement

The SDE++ and the PPA are two halves of one revenue stack and must be drafted together. The subsidy compensates the gap to a deemed market revenue; the PPA determines actual revenue. Where they are misaligned, the project bears the difference:

• Fixed-price PPAs. A fixed price gives no protection against the correction amount, which is set on market indices, not the project’s contract. In a high-price year the correction rises and the subsidy falls while the PPA price stays put.
• Negative-price hours. The PPA must say who bears the loss when subsidy is withheld, and whether the offtaker may or must instruct curtailment.
• Term and assignment. A ten-year PPA under a fifteen-year subsidy leaves a merchant tail lenders will size against, and an assignment clause that does not track the subsidy consent requirement can create deadlock.

Withdrawal, reduction and recovery

Behind the sector rules sits the general Dutch subsidy framework in Title 4.2 of the General Administrative Law Act (Algemene wet bestuursrecht, Awb). The scheme has its own framework decree, the Besluit stimulering duurzame energieproductie en klimaattransitie, and is not governed by the Kaderbesluit nationale EZK- en LNV-subsidies. Beneath the decree sit its general implementing regulation and the annual designation regulation setting categories, base amounts and deadlines.

• Article 4:46 Awb — the subsidy is determined in accordance with the grant decision, and may be set lower where activities were not carried out, obligations not met, or information was incorrect.
• Article 4:48 Awb — the grant decision may be withdrawn or amended to the recipient’s disadvantage before final determination.
• Article 4:49 Awb — the final determination may itself be withdrawn or amended to the recipient’s disadvantage on limited grounds, within a time limit.
• Article 4:57 Awb — amounts wrongly paid may be recovered, subject to a time limit.
• Article 4:95 Awb — the basis for advances, their set-off and reclaim.

The live triggers in practice are a missed commissioning deadline, failure to report, producing less than the decision assumed, and metering that cannot be reconciled. A grant decision creates no vested right to payment: only a conditional entitlement, crystallised on determination.

Objection and appeal against an RVO decision

Every SDE++ decision — a refusal, a grant on terms, a refused extension, an adjustment of advances, a final determination, a recovery — is an administrative decision (besluit) open to objection.

• Objection (bezwaar) is filed with RVO within six weeks of announcement of the decision, under article 6:7 Awb. The deadline is strict.
• RVO must in principle decide within the period set by article 7:10 Awb, which may be extended.
• Appeal (beroep) against RVO’s decision on the objection lies under article 8:1 Awb, again within six weeks, directly to the College van Beroep voor het bedrijfsleven, the specialist administrative court for economic matters. There is no first-instance route through the rechtbank.
• An objection does not suspend the decision, so where payments are stopped or recovery ordered a separate application for interim relief (voorlopige voorziening) is usually necessary.

Most disputes fall into three families: the operational deadline (whether commissioning occurred in time, and whether an extension should have been granted); the metering data (whether output recorded via VertiCer is correct and correctly attributed); and the correction amount. Challenges to the parameters themselves rarely succeed, because base and correction amounts are set by regulation, not in the individual decision. What works are arguments about facts, evidence and reasoning. The commissioning deadline dominates the reported cases, and the tribunal has been unsympathetic. In CBb 28 October 2025, ECLI:NL:CBB:2025:576, a request for exemption from the commissioning date was refused and the subsidy withdrawn because the installation had not been taken into use within eighteen months of the award decision; the conditions for extending the deadline were not met, there being no circumstances outside the recipient’s control, no irrevocable commitments for the installation itself and no start of construction. In CBb 29 October 2024, ECLI:NL:CBB:2024:756, withdrawal for late commissioning was likewise upheld, the tribunal rejecting arguments about the duty to hear, the care taken and the weighing of interests. The lesson for a developer is that the deadline is enforced on its terms and that an extension has to be earned on evidence, well before it expires.

State aid

The SDE++ is state aid and has been notified to and approved by the European Commission under state aid case SA.118519. RVO applies the European environmental and energy aid framework — the MSK in Dutch practice — through a cumulation test (the MSK-toets) to ensure a project does not receive more public support than permitted.

The practical consequence is the cumulation rule. Stacking the SDE++ with investment allowances, regional grants or EU funding is not prohibited, but the aggregate must stay within the permitted intensity, and exceeding it can lead to reduction or recovery.

Transfer of the project or of the company

An award is granted to a named producer for a named installation, and does not travel automatically with the asset. An asset transfer — selling the installation, or moving it into a project SPV — requires the subsidy to be transferred with RVO’s prior consent, and consent is not a formality: RVO will consider whether the acquirer can perform the obligations. A sale that closes before consent leaves the buyer owning an asset without the revenue stream that justified the price, so draft the conditions precedent accordingly. Transfer before the installation has been taken into use is in any event not permitted, save where an exemption is granted (art. 61 Besluit stimulering duurzame energieproductie en klimaattransitie).

A share transfer is different in principle: the recipient does not change, so no transfer of the subsidy occurs. The changes RVO asks to be told about are of a different order — a move, a change of contact person or bank account, a change in the location of the installation — and a change in the recipient’s shareholders is not among them; the transfer procedure bites only where the subsidy itself is to move to another party. Change of control can still trigger notification or consent obligations under the grid connection agreement, the PPA, the lease or the financing documents, and those are the ones to check in a share deal.